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Tax on investments
If you earn an income from your investments, you might need to pay an amount of tax. It's your responsibility to report and pay any due taxes to HMRC.
Explore tax guides
Helping you to understand when taxes might apply.
Capital Gains Tax
Capital Gains Tax (CGT) is payable on profits you make when you sell or dispose of an asset that has increased in value. It’s the gain that’s taxable, not the total amount you receive from the sale.
When you sell shares, the gain is calculated by subtracting the original purchase price – including any related costs – from the selling price.
In the UK, individuals have a yearly CGT allowance – £3,000 for the 2025/26 tax year. The rate of tax you’ll pay on gains that exceed this allowance will depend on your income tax band.
You won’t pay CGT on gains earned within a UK pension scheme or ISA.
Tax on dividends
Dividends are a portion of a company’s profits that are paid to its investors. The rate of tax you owe on dividends will depend on your income tax band.
Everyone has a dividend allowance, which is £500 for the 2025/26 tax year. This means you can earn up to the allowance in dividends each tax year without paying tax.
You won’t pay tax on UK dividends within a UK pension scheme or ISA although taxes or fees could apply to foreign stocks and investments.
ISA subscriptions
ISA Subscriptions allow you to save a set amount of money each tax year that is protected against UK capital gains and dividends tax. The amount is £20,000 for the 2025/26 tax year.
You can subscribe to multiple ISAs of the same type (except for Lifetime ISA) within the tax year. All subscriptions must stay within the overall ISA limit of £20,000.
Tax efficient investing
There are tax‑efficient investment options you can consider, which could help to keep more of the returns you earn in your pocket. These include ISAs, pensions and a handful of gilts, schemes and trusts.
Managing your tax responsibilities
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Important legal information
The Lloyds Bank Direct Investments Service is operated by Halifax Share Dealing Limited. Registered Office: Trinity Road, Halifax, West Yorkshire, HX1 2RG. Registered in England and Wales no. 3195646. Halifax Share Dealing Limited is authorised and regulated by the Financial Conduct Authority under registration number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.